Trading history is biggest barrier for self-employed
The ability to prove adequate trading history is the biggest hurdle faced by the self-employed in obtaining a mortgage, according to research by Kensington.
In a survey of 619 intermediaries, 42% said proving trading history is the biggest barrier for self-employed borrowers, while 23% selected complex income structure.
Some 15% of brokers asked said that self-employed circumstances do not fit standard credit scoring systems, while 12% said the self-employed’s own perception of how difficult mortgage finance is to obtain is the greatest obstacle.
Charles Morley, head of sales at Kensington, says: “It comes as no surprise that the main hurdles for the self-employed when it comes to getting a mortgage are trading history, complex income and credit scoring.
“While many successful small businesses emerge from recession, it is not unusual for a high street lender to ask for three years’ trading history.
“And whereas the self-employed will often have a complex income structure from more than one source, automated decision making systems take a more black and white stance on affordability.”
Article reproduced with permission by Mortgage Strategy. Click on the link for more mortgage stories from www.mortgagestrategy.co.uk
